One of the most interesting, yet sometimes frustrating, customer journeys for online merchants to watch is the one from choosing a product to finishing the purchase. Often, retailers believe the hard work is done when the customer has put something in the basket. However, it is often the case that they abandon the purchase at the last minute. There are many reasons for “abandoned carts”, and there are many ways to combat it. For instance, if you have the Dominos Pizza app, you’ll note that they will send a push notification a few minutes after you’ve added a pizza to the basket without completing the purchase. Many clothes retailers will also send emails to remind you that you have stuff in your basket. They may even tempt you back with a discount.
However, it is clear that one of the biggest barriers to “sealing the deal” is the choice of payment methods. Studies vary, but some have suggested that 90% of shoppers with abandoned carts have done so because of unsuitable payment methods. Others put the number at a lower figure, but, regardless of the statistics, it’s clearly an important issue: If you don’t have the right option for the customer, they may abandon the cart and go elsewhere.
More is sometimes less
Of course, the conventional wisdom would suggest that you simply add as many payment options as possible to your website. But this is only true up to a point. Some sectors can offer numerous payment methods. The online casino sector has many payment methods, for example. Yet, that is built into the casino’s strategy and budget. Having too many payment methods for a small operation can be confusing for the customer, and it can also be costly for the retailer.
Often, merchants try to cover the main bases. They will allow credit and debit card payments from the big hitters like MasterCard and VISA, and then some kind of online wallet, usually PayPal. The latter has huge coverage in North America and parts of Europe. However, it forces the merchant to start thinking about their markets. If, for example, you want to attract buyers from the burgeoning Chinese retail market, you might want to consider Alipay. If you are looking at Africa, you may think about Meeza and Fawry. Africans are also much more comfortable paying with mobile carrier partnerships. Of course, some retailers might also consider Apple and Google Pay.
Don’t put all eggs in one basket
All of this creates a scenario where the merchant takes on higher costs – integrations aren’t free on the merchant side, and they may incur a flat fee, a pay-by-purchase cost, or, more likely, both. There is also more administrative costs, and it can be difficult to get volume pricing. Much of this is combatted by the fact that having multiple payment methods gives the customer more options. This is particularly important if one gateway goes down. PayPal may be ubiquitous, but it is still susceptible to outages.
One should also consider future types of payment methods. Cryptocurrency is an interesting one. Despite some believing that it is faddish, it does not seem to be going away. Moreover, the arrival of stablecoins (PayPal recently announced support for US Dollar stablecoins) will pave the way for widespread adoption of crypto wallets. Some merchants will anticipate the coming of blockchain payments with the same kind of foresight as those adopting mobile payments in the late 2000s and the internet in the 1990s.
Overall, the point is that the decisions should not be taken lightly. If you choose a website builder, for example, you’ll be provided with several payment options for integration. However, you will need to make decisions specific to your business. You need to understand your potential customers, both in how they behave now and in the future. It’s one of the most important aspects of the customer experience. And there is no right answer that covers all businesses. Take time, consider the options and costs, and then accordingly.